Regions and municipalities in the Nordic region in 2016

A new wave of reforms sweeping over the Nordic countries?

Administrative municipal and regional reforms: Overview

In 2016, the Nordic countries are planning and/or implementing municipal and/or regional reforms. The reforms include changes in both the organization of authorities and the distribution of responsibilities, in some cases suggesting new geographic boundaries for administrative units. The reforms are intended to improve governance systems and will address several of the matters raised here. Nordregio has summarized the most important recent and ongoing changes.This section reviews municipal and regional reforms in the Nordic countries, alongside a description of the administrative geography of Denmark, Finland, Norway, Iceland and Sweden, as of June 2016. Specific emphasis is placed on the function of regions within the administrative system.

Review of the planning act in Denmark

In June 2016, there was no major ongoing discussion about municipal or regional reform in Denmark, mainly because a major reform was implemented in 2007. As a consequence of that reform, the number of municipalities was reduced from 271 to 98, and 14 counties (amt) were replaced by five new administrative regions (region). The reform was preceded by over 10 years of broad investigation into the principles of public sector organization and the responsibilities of the different layers of government, with the aim of creating larger and more efficient administrative units. However, in 2007, the Danish Government decided to implement the reform without any broad political consensus and not following the recommendations arising from the investigations.

Since 2007, the regional level does not have any formal regional planning mandate but serves as an important arena for co-operation. Regional councils (regionsråd) may veto municipal plan proposals that contradict the regional development plan. In 2014, the Danish Parliament passed an amendment to the Business Promotion Act (Erhvervsfremmeloven), combining the regional development plan and the regional business development strategies in a new regional strategy for growth and development (vækst- og udviklingsstrategi). The intention of this change was to create a new and consistent focus on growth and development at the regional level, under the responsibility of the five elected regional councils. The regional councils appoint growth forums, whose main purpose is to develop the region’s growth and development strategy, taking into account the national planning report. The intention of the amendment is thus to facilitate interaction between the regional development strategies and planning at local, regional and national levels.

New Finnish regions in the making

In recent years, there has been continuous discussion about regional and municipal reforms in Finland. Until recently, the focus was on implementing municipal reform to create more economically and functionally vital municipalities. In August 2015, municipal boundary reform was abandoned after four years of attempts. On a voluntary basis, however, four mergers will be realized during 2016.

The focus in 2016 has shifted towards creation of new larger regions and introduction of elected county governments. Finland so far has not had any directly elected regional bodies and instead has had a form of regional statutory joint municipal authority, which has meant that every local authority must be a member of a regional council. The councils have had two main functions laid down by law: (1) regional development and (2) regional land-use planning.

The current regional package intends to reform regional administration and is one of the largest administrative changes ever in Finland. It includes a number of changes in administrative structure, and the responsibility for providing public health care and social services will be moved from municipalities to the new counties. The proposal also stipulates that the new counties will take over the majority of the regional development and planning tasks of the ‘Centres for Economic Development, Transport and the Environment’, the statutory duties of regional councils, the responsibility for organizing the duties of ‘Employment and Economic Development Offices’ and certain tasks from municipalities and Regional State Administrative Agencies. The Centres for Economic Development, Transport and the Environment, Employment and Economic Development Offices, and regional councils will cease to exist from 1 January 2019.

Preparatory work on the regional reform is under way in 2016. The Government has charged a specific working group with the task of designing these reforms. The Government’s aim is to transfer the organization of health care and social services and other regional services to counties on 1 January 2019.

Inter-municipal co-operation in Iceland

In recent decades, Iceland has implemented two systematic reforms in municipal structure, one in 1993 and one in 2005. It is important to note that there is no regional government level in Iceland, although there are eight statistical subnational units. Under these two reforms, traditional national responsibilities have been functionally delegated to the municipalities, and the number of municipalities has been reduced, from 124 in 1998 to 74 in 2013.

More recently, the goal has not been to enforce further mergers of municipalities but instead to promote inter-municipal co-operation as a way of delivering public services. In 2015, the Minister of the Interior proposed to initiate a working group focused on improving municipal governance. The proposal suggested that the working group could draft a specific action plan for the next 10–12 years and that the objectives should include identification of ways to improve municipal co-operation, resident involvement, and quality and diversity in public services. The action plan also includes a new legal framework for public finances and the development of information technologies to provide new opportunities for public administration.

Regional development activities are organized by a national state agency: the Icelandic Institute of Regional Development. The institute monitors and advises on regional development. Its main function is to contribute to regional development through the implementation of government policy via the introduction of regional strategies. Its operations are aimed at strengthening settlements in rural areas through the support of viable, long-term projects with diverse economic bases. The capital area of Reykjavík is not eligible for support from the institute.

Municipal and regional reform on its way in Norway

After the current Norwegian Government took power in 2013, there were continuous parliamentary debates regarding municipal and regional reforms. A municipal and regional reform bill was subsequently passed by the Norwegian parliament in 2014. It initiated a process, currently voluntary, where municipalities and regions seek alliances with neighbours. At the same time, the Government is reviewing the organization of functions and responsibilities between the different administrative levels. The last municipal and regional reforms in Norway took place more than 50 years ago. Since then, greater responsibility has been given to the 428 municipalities and 18 counties. This has challenged their ability to deliver sound welfare services and to manage urban/rural challenges (read more about this in Nordregio News, September 2015). In 2014, the Ministry of Local Government and Modernisation appointed an expert commission to propose criteria for the reform and to provide recommendations. They made recommendations regarding the ideal population sizes for municipalities to ensure service quality, and a recommendation that municipal structures should be more aligned with functional development areas.

The Government presented their proposal of a new regional structure in April 2016. The proposal includes new tasks and responsibilities for the regions, along with geographical restructuring halving the number of regions from 19 to 10. The rationale behind the proposal is to strengthen the regions as functional units and to provide more coherent housing and labour market areas.

The reform road map indicates that regional decisions on county mergers are expected in 2016 and that municipal and regional mergers should be done mutually. The Government’s ambition is to take parliamentary decisions on both the municipal and regional reforms during spring 2017, followed by election of new municipalities and new regions in autumn 2019. The reforms can then be implemented from 2020 (read more in Nordregio News, September 2015).

Sweden

In Sweden, in recent decades, there have been several debates and multiple investigations regarding regional structure, but the municipal level remains dominant. The regional structure was already under investigation in the 2000s, and a Committee on Public Sector Responsibilities was appointed in 2003 to clarify the division of responsibilities between the different levels of government. Despite the positive response from many of the actors involved, the Government at the time decided explicitly to decentralize the reform process to the regions and left it up to them to propose regional amalgamations. However, in March 2015, the new Government started an investigation into larger regional mergers, taking changes in functional geographies into account.

A committee will propose, by 31 August 2017, a new division of the counties and county councils based on, for example, the needs of citizens and businesses regarding transportation, labour, health, education, culture and a good environment. One important principle is to create appropriate subdivisions, and hence effective organizations, by taking into account functional labour markets and their regions.

The current Government argues that the existing regional structure is a complex mess of geographically unevenly distributed responsibilities for regional development. In four counties, the County Administrative Board is responsible for regional development issues, but in 10 counties, since 2015, the responsibility has been assigned to the directly elected County Council or the rather newly formed regions. In the other counties, a specifically installed inter-municipal co-operation agency is charged with the task of responding to regional development questions. The Government’s ambition is to launch a new regional reform from 2023, although there may be new mergers as early as 2019. In 2016, a proposal to reduce the number of regions from 21 to 5 larger regions was presented.

The current administrative system in Sweden consists of two main regional bodies in each county: the County Administrative Board, which represents the Government at the regional level and acts as a regional co-ordinating body for the State, and the County Council (or Region), which is a directly elected regional body responsible for health care and public transport. Ten County Councils (out of 21) have additional responsibilities, such as regional development. In the rest of the country, regional development falls under the responsibility of either the County Administrative Boards (in four counties) or Regional Co-ordination Bodies, which are indirectly elected assemblies owned by municipalities and county councils (in seven counties).